Rampant fraud shows no sign of slowing, putting sustained pressure on UK Courts

The situation for the General Public in terms of fraud is dire and the outlook is even worse. In June this year, UK Finance¹ said that the UK is experiencing an “epidemic of fraud” and the latest Fraud Barometer figures support this assessment. In the first half of 2022, the General Public were the group scammed most by volume with 47 cases reaching the UK Crown Courts. Furthermore, the value of fraud allegedly carried out on the General Public went up by 74% – from £43.1m in H1 2021 to £75m during H1 2022.

Roy Waligora, commented:

“That criminals are still taking advantage of susceptible members of the public is distressing to see, particularly when considering the Fraud Barometer only captures cases where charges are over £100k. With the cost-of-living and energy crises beginning to bite, these both create fresh opportunities for fraudsters to commit even more crimes against the public, and people need to be made aware of new emerging scams. But it isn’t solely individuals’ responsibility to educate themselves. Banks, Government, and technology companies all need to play a part to make any progress in tackling the issue.” 

For the first six months of 2022, Financial Institutions had the most fraud cases reach UK Crown Courts by value, at a total worth of £305.2m for nine cases, a vast jump of 4,333%, up from £6.9m for 13 cases during the first half of 2021. In the context of a changing global banking landscape, where branch networks are shrinking, volumes of digital payments are increasing and payments are being processed in seconds, the data illustrates that fraudsters are creatively finding new ways to steal more from financial institutions and their customers.

Providing his perspective on the findings, Roy Waligora, said:

“Customers see the role of financial institutions as keeping their money safe and do more to prevent fraud, but the latest Fraud Barometer data suggests that this is a real challenge. In tandem, customers expect a certain level and speed of service, which could be hindered by additional fraud prevention measures, such as Strong Customer Authentication (SCA), introduced in March this year.”  

Money laundering cases were by far the most significant type of fraud in terms of value at £297.6million for seven cases in H1 2022, rising 16,781% from £1.8million for five cases in the first six months of 2021. This was largely due to a single high value case of £266million, where money was laundered through a company bank account and the proceeds used to purchase gold over a period of two years.

Triggered by Russia’s invasion of Ukraine, the newly passed Economic Crime Act and a second Economic Crime Bill that is expected in the coming months, contain measures designed to increase transparency and give law enforcement enhanced powers to combat money laundering. They also provide law enforcement with enhanced anti-money laundering powers to encourage businesses to share information on suspected economic crime. As a result of this legislation, in the short term there is likely to be an uptick in this kind of fraud reaching UK Crown Courts as more of this type of crime is identified. 

• Embezzlement was the most common type of fraud reaching UK Crown Courts, with 18 cases in the first half of 2022. But this was down from a total of 26 during the same period in 2021 (although the total value is similar).
• Advance fee fraud, when fraudsters target victims to make advance or upfront payments for goods, services and/or financial gains that do not materialise, has jumped from two cases in H1 2021 worth £1.2m to nine cases in H1 2022 worth £11.6m.
• It’s good news for businesses as fraud carried out by employees went down by nearly two thirds in terms of volume, from 38 to 14, and nearly halved in value from £20.1m to £10.7m.
• However, fraud carried out by management rose from £23.3m for 31 cases in the first half of 2021, to £110m for 34 cases in the first half of this year, an increase of 372%.
• Fraud allegedly perpetrated by a private individual jumped from £1.9m for seven cases in H1 2021 to 14 cases seen in the first half of 2022 to the value of £26.2m. For example, a woman was jailed after blackmailing a wealthy businessman for £10m after she threatened to reveal private personal details about him to his children.

-ENDS-

Notes to editor:

1.       UK Finance Annual Fraud Report

About the Fraud Barometer

The KPMG Fraud Barometer is the longest running study of its kind in the UK. It has been tracking fraud trends since 1980s and its analysis of cases has continually identified trends in the types of fraud that have dominated courts. It considers major fraud cases being heard in the UK’s Crown Courts where charges are £100k or above that have been reported on in the media. 

About KPMG

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